June 23, 2018
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Study: Lobster supply chain contributes $1B to Maine economy each year

Robert F. Bukaty | AP
Robert F. Bukaty | AP
In this Thursday, Dec. 10, 2015, file photo, live lobsters are packed and weighed for overseas shipment at the Maine Lobster Outlet in York, Maine. A study released this week by Colby College and Maine Lobster Dealers' Association indicates that lobster dealers, distributors, and processors contribute $1 billion to the state economy each year.
By Bill Trotter, BDN Staff
Updated:

A new economic study shows that the lobster supply chain in Maine contributes $1 billion to the state’s economy each year and generates 4,000 jobs throughout the state.

The economic impact study, conducted in 2016 by Colby College and Maine Lobster Dealers’ Association, examined the system of dealers, distributors and processors in the state that transfer lobster from the docks where fishermen unload to the places where consumers buy Maine’s signature seafood product. It took into consideration upstream and downstream spending on total lobster purchases; wages and taxes; operating expenses and capital investment, among other facets of the industry’s complicated supply chain.

“The impact generated by our wholesalers and processors is massive,” said Annie Tselikis, executive director of the dealers’ association.

The estimated $1 billion impact is on top of the income that lobstermen earn when they bring their catch to shore and sell it, which in 2017 was $433 million statewide.

[Maine’s annual lobster landings drop by nearly $100M in value]

Michael Donihue, economics professor at Colby and project leader for the study, said Thursday in a prepared statement the supply chain may not be as conspicuous as the fleet of lobsters boats that come and go each day from Maine’s harbors, but that it nonetheless pays a significant role in the state economy.

“It is a complicated process getting that lobster to market, and it is the lobster dealers and processors that do that work,” Donihue said. “The individual businesses provided their spending patterns and stories about their economic footprint in their communities. They wanted [the study] to be as accurate as possible.”

Brendan Ready, owner of live lobster dealership Ready Seafood and of seafood processing firm Maine Seafood Ventures, was one of 21 dealers in Maine that provided detailed information about their economic activity to Donihue. He said Friday that the businesses in the supply chain should be more willing to work with each other, and with fishermen, to help further boost global demand for Maine lobster.

“The more collaboration we can achieve as a group, that’s what is going to make our industry be better and grow,” Ready said Friday, speaking about the study at the Maine Fishermen’s Forum in Rockport. “We have to take it more seriously, in my opinion. This [study] is a great first step.”

One of the ways fishermen and dealers can work together is to improve handling of lobster as it is removed from traps at sea and then moved onshore. Scout Wuerthner of Inland Seafood said that his company wrote off $1 million last year in losses due to mishandled lobster.

“It’s horrible that we’re taking something out of the ocean and it never gets to someone’s plate,” Wuerthner said Friday.

Ready said many dealers each lose significant of money each year from ‘shrinkage,’ which is an industry term for lobsters that dealers buy but have to discard because they die and can’t be used. If better handling practices were more widespread by fishermen and dock workers, he said, dealers would have fewer resulting losses and fishermen could get more money for their catch.

“It’s staggering. We’re talking millions of dollars” that many dealers lose each year from shrinkage, he said.

The Cranberry Isles Fishermen’s Co-op is one entity that has purposefully improved its handling practices to reduce the amount of lobster it sells that later dies in transit to the consumer, Ready said. It is one reason his Portland-based business buys lobster from that cooperative, which is located off Mount Desert Island.

“Their shrink rate I’m willing to bet is, if not the lowest, one of the lowest in the entire state,” Ready said.

Tselikis said the study is the first to examine the economic impact the dealers and processors have in getting the product to market. Not only does the study provide dealers with a clearer picture of the economic impact of what they and their competitors do, but it helps shed light on the scope of the industry as a whole as it contends with pressure from whale conservation efforts, international trade barriers, and competing ocean activities such as energy development.

“They are big, big challenges,” Tselikis said of outside factors affecting the lobster industry. “We are fortunate to have a better understanding of the true impact of this sector.”

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